The Simple But Horrifying Fallacy at the Core of the Tea Party

It’s hard to say if the Tea Party has an acknowledged leader, but someone who professes to be just that has chosen a very opportune moment to trash Speaker John Boehner’s attempts to craft legislation that would allow an increase in the debt ceiling. Judson Phillips, the CEO of Tea Party Nation, is the self-acknowledged head of the Tea Party, and in an editorial this morning in The Washington Post, he attacks Boehner’s legislation for providing ”œalmost non-existent budget cuts.”

Phillips says:

As the founder of Tea Party Nation, I feel confident in saying that the Tea Party understands what so many in Washington seem to have forgotten: We do not have a debt crisis. We have a spending crisis. There is only one way you get to a debt crisis ”” you spend too much money.

Here is what is fundamentally wrong and dangerous with the core assumption of the Tea Party: There are two ways to get to a debt crisis ”“ you either spend too much money or you don’t take in enough revenue. Anyone who has done a family budget or a business budget understands there are two sides to every discussion of cash flow: cash flow in, and cash flow out. In government terms, this equates to taxes received and expenditures made.

By taking one half of this equation out of the discussion, the Tea Party is dragging the nation along on a fantasy ride in which only spending cuts are allowed as a solution to the government’s debt problem. The danger in an approach which demands enormous budget cuts – $4 trillion is the number mentioned by the Tea Party ”“ is that you expose the economy to a depressionary shock, especially since the Tea Party wants the cuts immediately. Immediate cuts of that size would be the equivalent of removing 25% of all cash flow out of the economy, throwing tens of millions of middle class Americans into acute financial stress. For many poor people, it would be an existential crisis, in which starvation becomes a real prospect.

What sort of person would deliberately ignore the obvious fundamental reality of any budget? Tea Partiers have been called crazy, ”œnutters”, reckless, irresponsible, and just plain stupid. I suspect they have bought into a partisan set of talking points that have been dogma for many years in the Republican Party. First, all taxes are bad, because they steal money from hard-working people and deprive businesses of the means of creating jobs. Second, government spending is generally bad because it makes people indolent and dependent on hand-outs. Third, deficits are bad because they stifle economic growth.

Tea Partiers are obviously creatures of the Republican Party. Fifty of them sit on the Republican side of the aisle in the House of Representatives. They pride themselves on attracting someone like Sarah Palin as a keynote speaker at their conferences. They get funding from right-wing special interest groups. They are partisan in their approach to politics, excoriating liberals and Democrats, and eager to push the Republican Party into their imaginary world where all government deficit problems can be solved simply by cutting and capping expenditures. In his editorial, Judson Phillips ascribes all of the spending problems to the ”œObama-Pelosi-Reid axis of fiscal evil.” What happened to George W. Bush and his $300 billion annual tax cut, his unfunded wars, his drug company give-away, and his bailout of the banking industry? You are no longer dealing in fantasy when you ignore the president and party who in 2000 inherited a budget surplus and converted it into a $1 trillion+ deficit.

Party hack though he is, Mr. Phillips makes some good points about waste and fraud in the federal budget. These points are lost, however, in his one-sided mind set: he takes only the Republican side in the politics of the deficit debate, and then he requires that we look only at the spending side in the budgetary calculus. We could say that his approach helps no one, but in point of fact there are some beneficiaries, namely all the people who have direct access and influence with Congress so that they can get their taxes cut at the exclusion of everybody else. That would be wealthy people, and large corporations.

As much as the Tea Party likes to fancy itself as independent, it has become the radical wing of the Republican Party. It would be bad enough if the only thing the Tea Party might accomplish would be pulling the Republican Party to the fringe of radical conservatism, but it is doing more than that. It is holding the Republican Party hostage to its immensely dangerous concept that the only solution available to the federal deficit is to cut spending. The Republican Party in turn is holding the country hostage over the same profoundly simple error ”“ that taxes cannot be raised as a matter of principle. When one party in a two-party system perpetuates and insists on such an appalling error, the people who are going to get hurt are the 99% of the population who no longer are represented in the Congress.

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Numerian is a devoted author and poster on The Agonist, specializing in business, finance, the global economy, and politics. In real life he goes by the non-nom de plume of Garrett Glass and hides out in Oak Park, IL, where he spends time writing novels on early Christianity (and an occasional tract on God and religion). You can follow his writing career on his website,

8 CommentsLeave a comment

  • Since the election of Obama the Republican party’s game plan has been obstructionist. Look how things have changed, the party of the neocons, has expressed dismay at the present administration’s efforts in the Lybian civil war.
    A couple of years ago, at an intersection in town used by the Tea Party demonstrators, a lone wingnut held up a sign that said, “Democrats hate God.” WHO ARE THESE PEOPLE? To me they are hateful, misinformed, racist, anti immigration, hypocritical
    and a bit wacked. They are also empowered by the present pissing match in the House.

  • They’re just the party of “undo liberalism” nowadays (whatever that happens to mean this week).

    The neocons were last decade’s mutual “convenient idiocy” and the Teabaggers are this decade’s, but one would be hard pressed to point to a single remaining coherent idea that represents what they’re the party of except that.

    “The best-informed man is not necessarily the wisest. Indeed there is a danger that precisely in the multiplicity of his knowledge he will lose sight of what is essential.”

    – Dietrich Bonhoeffer

  • The federal government is not constrained by its tax revenue since it legally creates the currency. It does not have to take currency in so that it may then spend because it generates currency at will. It first spends, then takes currency in to regulate private sector demand and keep inflation checked.

    The budget of the fiat currency issuer does not work like that of a currency user in the private sector. Not all budgets are run the same way.

    /broken record

    But yes, I agree that the Tea Party is insane and blinded by a terribly false ideology. What they are advocating will destroy this country’s economy.

    Broken record: But the other parties in the debate are blinded by the same false ideology–they just happen to be sanely applying it. /broken record

  • reinforces a mistaken abstraction. Governments can create money. Households cannot. The dangers for governments are in creating either too much or too little and/or putting newly created money into the wrong hands.

    Like wise the removal of money from an economy must be done with care. Right now way too much money is in the hands of the rich and they are not using the monies they have to help the economies of the rest of us. They need money taken from them. It is not necessarily necessary to balance the money taken with the money placed elsewhere economically speaking. Perhaps more needs to be withdrawn than replaced or perhaps more needs placement than is withdrawn.

    The canary guide seems to be hyper-inflation especially in wages and salaries. The clue that more money needs pumping into the bottom is lack of jobs and lack of appropriate price inflation.

    I’m no economist (and I’m not bragging) but that’s my current take.

  • The analogy to the ‘family budget’ which these people constantly make has nothing whatever to do with cash flow and expenditures. The thing households have (and which they sorely want) is the power to take away a household member’s allowance–to have the power to make you do without. Tee-Partay people fancy themselves as the “grown-ups” and want to control the nation’s budget the way stingy or punitive parents do. It is about the power to punish, to withhold, to reserve the authority to make anyone do without. I think this is what is so pathetic about them, and why they are so elementally attracted to Christian fundamentalist dog-whistling too.

  • Because they will never be exposed to the true consequences of their desires.

    If the policies the the Tea Party clamors for were to be implemented, there would be no police or fire departments, air travel would be 10x as costly, national infrastructure would disintegrate, there would be no social services such as unemployment and disability insurance, no libraries, no public schools, no public universities, no work safety standards, no food safety inspections, no scientific and medical research… nothing. America would become Afghanistan, with the same national quality of life but with a Christian Taliban instead of a Muslim Taliban.

  • His profits are going somewhere, but his bills aren’t getting paid. I guess a for-profit political party gets all the pretense out of the way. I suspect this guy and his party aren’t going to be around after a few more years – he sounds like a disaster waiting to happen.

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